Chairman to hand over Ampal to bondholders as debt talks stall

Published November 11, 2012

Reuters

JERUSALEM – The chairman of Ampal-American Israel Corp has decided to hand the company over to its bondholders after an agreement could not be reached on a debt restructuring, a company spokesman said.

A representative of Ampal and chairman Yossi Maiman made the comment at a meeting with a creditors committee appointed by a U.S. court after Ampal in August filed for Chapter 11 bankruptcy protection as it faced a deepening financial crisis after Egypt halted natural gas supplies to Israel.

Ampal holds 12.5 percent of East Mediterranean Gas Co, the sole supplier of gas from Egypt to Israel until the Egyptian government cancelled its 20-year agreement signed in the Mubarak-era earlier this year.

Ampal had sought to renegotiate agreements on three series of bonds with its bondholders and had proposed postponing paying the principle on its bonds by two years while offering bondholders shares in the company.

The spokesman noted Ampal had reached a deal with most main bondholders on a debt restructuring but that a minority was opposed to any deal.

"In his (Maiman's) opinion, they were harming the company ... so he said: 'take the company and let's see where it goes from here'" the spokesman said.